Why the Lame Duck Congress Must Extend Jobless Benefits for Hard-hit Families But Not Tax Cuts for the Rich

America’s long-term unemployed — an estimated 4 million or more — constitute the single newest and biggest social problem facing America.

Now their unemployment benefits are about to run out, and the lame-duck Congress may not have the votes to extend them. (You can forget about the next Congress.)

The long-term unemployed can’t get work because there are still five people needing work for every job opening. And the long-term jobless are often at the end of the job line: Either they don’t have the right skills or enough eduction, or have been out of work so long prospective employers are nervous about hiring them.

They’re also a big problem for the economy. Without enough money in their pockets, they and their families can’t pay their mortgages, which keeps fueling the mortgage crisis. Nor can they replace worn-out cars and clothing, or buy muchof anything else, which is a drag on the economy.

Republicans and many blue-dog Dems say we can’t afford another extension.

But these are many of the same people who say we should extend the Bush tax cuts for the wealthy for at least another two years.

Extending the Bush tax cuts for the top 1 percent would cost an estimated $120 billion over the next two years. That’s more than another unemployment benefit extension would cost.

The unemployed need the money. The rich don’t.

Moreover, the top 1 percent spends a small fraction of their income. That’s what it means to be rich — you already have most of what you want. So extending the Bush tax cut to them won’t stimulate the economy.

Yet people without jobs, and their families, are likely to spend every penny of unemployment benefits they receive. That will go back into the economy and save or create jobs.

A Labor Department report shows that for every $1 spent on unemployment insurance, $2 are spent in the economy. If you don’t believe the Labor Department, maybe you’ll believe Goldman Sachs analyst Alec Phillips, who estimates that if unemployment benefits are allowed to expire, the American economy would slow by a half a percent.

Republicans are still spouting nutty Social Darwinism. Cutting taxes on the rich is better than helping the unemployed, they say, because the rich will create jobs with their extra money while giving money to the unemployed reduces their desire to look for work.

Rubbish. The Bush tax cuts on the top never trickled down. Between 2002 and 2007 the median wage dropped, adjusted for inflation. And job growth was pathetic.

Jobless benefits don’t deter the unemployed from finding work. In most states, unemployment benefits are a fraction of former wages. And as long as unemployment remains sky-high, there are no jobs to be had anyway.

Besides, the economic downturn was hardly their fault. If anyone is to blame it’s the high-flyers on Wall Street who gambled away other people’s money, and the rich denizens of corporate executive suites who have sliced payrolls in order to show higher profits (and get more money from their stock options).

So why reward the people at the top with an extension of the Bush tax cut that will blow a hole in the budget deficit? And why fail to extend jobless benefits to hardworking Americans who got the boot?

Quick action is needed. Jobless benefits begin to lapse in just two weeks. Two million unemployed workers will be affected. If Congress fails to act, another 1.2 million will stop receiving benefits by the end of December. Most of the rest of those who now receive federal emergency extended benefits will gradually lose them.

Don’t extend the Bush tax cuts to the wealthy. Give unemployment benefits to people who need them.

Robert Reich is the nation's 22nd Secretary of Labor and a professor at the University of California at Berkeley.

He has served as labor secretary in the Clinton administration, as an assistant to the solicitor general in the Ford administration and as head of the Federal Trade Commission's policy planning staff during the Carter administration.

He has written eleven books, including The Work of Nations, which has been translated into 22 languages; the best-sellers The Future of Success and Locked in the Cabinet, and his most recent book, Supercapitalism. His articles have appeared in the New Yorker, Atlantic Monthly, New York Times, Washington Post, and Wall Street Journal. Mr. Reich is co-founding editor of The American Prospect magazine. His weekly commentaries on public radio’s "Marketplace" are heard by nearly five million people.

In 2003, Mr. Reich was awarded the prestigious Vaclev Havel Foundation Prize, by the former Czech president, for his pioneering work in economic and social thought. In 2005, his play, Public Exposure, broke box office records at its world premiere on Cape Cod.

Mr. Reich has been a member of the faculties of Harvard’s John F. Kennedy School of Government and of Brandeis University. He received his B.A. from Dartmouth College, his M.A. from Oxford University, where he was a Rhodes Scholar, and his J.D. from Yale Law School.

problem is job creation in this country is virtually zero, outside of low paying temp jobs, hiring is non existent.i agree, if you’re gonna print a borrow trillions of dollars, may as well pump some of it into welfare handouts

the big question is when will it end? can’t keep extending forever. most third world countries don’t even have unemployment benes.and u can’t borrow and print forever,although i suspect these clowns will give it a damn good try

For the people who say enough is enough and when will unemployment benefit extensions cease, I would love to hear what your solution is for those out of work with no job prospects in sight!! What is your solution for those people who have families to support and who are on the verge of losing everything including a roof over their heads, what say you to the folks who put out hundreds of resumes and aren’t being called back even for an interview?? Unless you are in the shoes of these folks, you will never understand. Bush’s tax cuts extensions for the rich over 10 yrs will cost in the hundred billions!! That’s justifiable and of importance but, the american whose been jobless is not!! Very unfair and sad indeed